January 28th, 2019 2:05 PM by Richard Sardella MLO.100007700/NMLS 233568
Foreclosures down 78% since 2010
To those of us who were homeowners ten years ago, "foreclosure" was a word we heard on the daily news or saw happening in our neighborhoods. It scared many of us. While it’s not a topic that is mentioned much anymore, it’s good to know that foreclosure filings are down by 78% from a peak in 2010, hitting its lowest level since 2005, according to a new study released by ATTOM Data Solutions.
A reported 77,049 filings were recorded in April, down 7% from March and down a full 23% from April 2016 to the lowest level since November 2005. Foreclosure filings — default notices, scheduled auctions, and bank repossessions — were reported on 624,753 US properties in 2018, down 8% from 2017 and down 78% from a peak of nearly 2.9 million in 2010.
“Plummeting foreclosure completions combined with consistently falling foreclosure timelines in 2018 provide evidence that most of the distress from the last housing crisis has now been cleaned up,” said AATOM’s chief product officer. He goes on to say that there was also some evidence of distress gradually returning to the housing market in 2018, some of it driven by natural disasters. In Houston, for example, foreclosure starts increased 61%.
However, he said, none of this explains an increase in foreclosures in markets such as Detroit, Minneapolis-St. Paul, Milwaukee, and Austin — all of which posted double-digit percentage increases in foreclosure starts in 2018.
The largest declines, according to the report, were in Rhode Island, Hawaii, North Carolina, Washington, and Connecticut. The largest increases in foreclosure starts included Minnesota, Texas, Michigan, Florida, Louisiana, and Delaware. There was an elevated share of repeat foreclosures on homeowners who often fell into default several years ago but have not been able to avoid foreclosure despite the housing recovery, according to experts.
In its recent analysis, ATTOM studied five markets. It showed the highest share of repeat foreclosures occurred in New York City at 54%, followed by Los Angeles at 39%, Miami-Dade County at 32%, Maricopa County, Arizona at 26% and Essex County, New Jersey at 20%.
Source: ATTOM | TBWS
How Rates Move:
Conventional overnment (FHA and VA) lenders set their rates based on the pricing of Mortgageand G-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I’m among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are trending sideways this morning. Last week the MBS market worsened by -3bps. This was not enough to worsen mortgage rates or fees. Mortgage rates moved sideways all week on very low volatility.
This Week's Rate Forecast: Neutral
Three Things: These are the three areas that have the greatest ability to impact mortgage rates this week. 1) The Fed, 2) Geopolitical and 3) Domestic.
1) The Fed: The Federal Reserve Open Market Committee (FOMC) will start two days of meetings on Tuesday which will culminate in their latest interest rate decision and policy decision on Wednesday. Starting at this meeting, all FOMC meetings will be followed by a live press conference with Fed Chair Jerome Powell. Whereas in prior year's, only certain meetings had live press conferences. The markets are widely expecting that the Fed will stand pat on rates this time around as they wait to see how much drag the government shutdown has had on our economy as well as slower economic growth (but still growth) overseas.
2) Geopolitical: Brexit will continue to be in the headlines again this week, with the UK parliament voting on possible next steps on Tuesday. Trade War - Chinese Vice Premier Liu He visits Washington for trade talks on Wednesday, meeting with Treasury Secretary Mnuchin and US Trade Representative Lighthizer.
3) Domestic: For the first time in a long time, we have some economic data that matters. In fact, we have a deluge of big-name economic releases that have the gravitas to move the needle on your rates. We get our first glimpse at the 4th QTR GDP, PCE (The Fed's key inflation measure), Chicago PMI and ISM Manufacturing, Consumer Confidence and Consumer Sentiment and a ton of Jobs data. While the number of new Non-Farm Payroll adds will likely be at 1/2 of what we saw last time around, the focus is on Average Hourly Wages which is expected to hold at 3.2% which is a very high level.
Treasury Actions this Week:
This Week's Potential Volatility: High
Mortgage rates and the markets have a lot of economic data to digest this week. Throw in the geopolitical and trade uncertainty, and we have a high probability of some rate volatility. Today, rates are likely to move sideways. Tomorrow we start to get the economic data that can move rates.
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
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